How Many Billions Of Drug-Laundered Money Does It Take To Shut Down A Bank?

Tyler Durden's picture

It's an odd question, we know - especially ahead of today's Stress Tests, but given today's testimony on assessing the bank secrecy act, apparent trouble-maker Elizabeth Warren pokes and prods (correctly we would add) at the surreality that exists between the Department of Justice, The Treasury, and the financial system. David Cohen, Tom Curry, and Jerome Powell dodged bullets and blame, "does that mean essentially we have a prosecution-free zone for large banks in America?" But Warren wasn't going to be fobbed off with useless banter as she pointed out, "if you're caught with an ounce of cocaine, the chances are good you're going to go to jail... for the rest of your life. But evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night - I think that's fundamentally wrong." Indeed Ms. Warren.


Here is the transcript - note the Treasury officials never actually answer anything...

WARREN: ... As Senator Reed just pointed out, the United States government takes money laundering very seriously for a very good reason. ...


Now in December, HSBC admitted to money laundering. To laundering $881 million that we know of for Mexican and Colombian drug cartels. And also admitted to violating our sanctions for Iran, Libya, Cuba, Burma, the Sudan. And they didn't do it just one time. It wasn't like a mistake. They did it over and over and over again across a period of years. And they were caught doing it. Warned not to do it. And kept right on doing it. And evidently making profits doing it.


Now HSBC paid a fine, but no one individual went to trial. No individual was banned from banking. And there was no hearing to consider shutting down HSBC's activities here in the United States. So what I'd like is, you're the experts on money laundering. I'd like your opinion. What does it take? How many billions of dollars do you have to launder for drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution like this? Mr. Cohen, can we start with you?


COHEN: Certainly Senator. No question the activity that was the subject of the enforcement action against HSBC was egregious...


WARREN: But let me just move you along here on the point Mr. Cohen. My question is, given that this is what you did, what does it take to get you to move towards even a hearing? Even considering shutting down banking operations for money laundering?


COHEN: Senator, we at the Treasury Department under OFAC and (ph) authority, we don't have the authority to shut down a financial institution...


WARREN: I understand that. I'm asking, in your opinion, you are the ones who are supposed to be the experts on money laundering. You work with everyone else, including the Department of Justice. In your opinion, how many billions of dollars do you have to launder for drug lords, before somebody says, we're shutting you down?




WARREN: ... And I'm asking, what does it take, even to say, here's where the line is. We're going to draw a line here, and if you cross that line, you're at risk for having your bank closed?




COHEN: But I'm not going to get into some hypothetical line drawing exercise.


WARREN: Well it's somewhere beyond $881 million of drug money.


COHEN: Well Senator the actions, and I'm sure the regulators can address this issue. The actions that we took in the HSBC case, we thought were appropriate in that instance.




WARREN: So what you're saying to me is you are responsible for these banks, and again, I read your testimony and you talk about the importance of vigorous enforcement here. But you're telling me you have no view when it's appropriate to consider even a hearing to raise the question of whether or not these banks should have to close their operations when they engage in money laundering for drug cartels?




WARREN: I understand that I'm over my time. And I'll just say here, if you're caught with an ounce of cocaine, the chances are good you're going to go to jail. If it happens repeatedly you may go to jail for the rest of your life. But evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night. Every single individual associated with this. I just, I think that's fundamentally wrong.

(h/t Manal Mehta)

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nmewn's picture

We differentiate "banks" from Investment Banks.

Do you, in your perfect world?

DaveyJones's picture

if I recall correctly, about ten years ago, when we ripped down that division in the hallowed halls, there was one republican and one democrat who stood up, reminded them of history, and said that within ten years we would seriously regret it. The rest basically kept their mouth shut

Tells us a lot about our two parties

nmewn's picture

Yep...and even GLB was threatened with a presidential veto unless the CRA was strengthened as well...probably on "advice" from Rubin.

XitSam's picture

Ron Paul worked with Barney Frank to end federal prohibition on marijuana.

Ron Paul worked with that loudmouth liberal from Florida1, Alan Grayson to audit the Fed.

Warren is what you say. And I find Congressional hearings mostly pointless exercises, but I support her questions today.

1 I forgot his name so i searched for "loudmouth liberal from Florida" and found it.

fonzannoon's picture

How many people on here bank with any of these crooks? I'm just curious. Those banks, even the big ones, have so little actual cash I bet the few of us on here could cause a good old fashioned bank run if we wanted to.

nmewn's picture

Alan Grayson is a real piece of work...has most people in law & finance at Harvard...and manages to lose his ass in an offshore financial scam.

And of course, wrote it all off on his tax forms, sticking taxpayers with the loss...if one thinks like a "progressive".


fonzannoon's picture

thanks nmewn. Grayson had me fooled. I gave him credit for being aware of offshore financial scams. Did not know much more about him.

nmewn's picture

Its easy to fool people, just tell em what they want to hear.

I was stunned when ZH gave Grayson the same status (if I can say it that way) as RP just because he jumped on the audit the Fed bandwagon, Grayson is no friend of the common people.

RockyRacoon's picture

How 'bout you give us your list of those in government whom you think might be doing a good job?

I'd like to see who can live up to your absolutist standards.

nmewn's picture

Ted Yoho, Nugent, Cruz, there's quite a few actually...the young turks are not the old guard.

putaipan's picture

nmewn- thanks for the heads up on grayson...he has survived in fla. i shoulda put that together. that's about like survivin' and thrivin' from illinois. and i shoulda learned my lesson a long time ago with someone like dodd  when he was all righteous and right about central america back when bush vice was iran conta-ing.


rcoon- well paul and dicuccinch are gone.... (graysons just been exposed, and they must have flat out threatened marcy kaptor)  these truly must be the times that try men's souls.

Raymond Reason's picture

Where are you Otto?  Here's one of the guys who bum rushed you yesterday, using your own argument concerning Rand P, sans Israel. 

SheHunter's picture

..."forcing churches to give birth control to their members..."  You don't say, Harbinger!  Are the little boy molesting priests standing on the necks of innocent pious church going women and shoving these dreaded pills down their throats?  Say it isn't true!

dunce's picture

The old saying "it takes one to know one" and as a fraud herself she knows bank fraud when she sees it. Soon she will get in line with the other corrupt senators like Schumer and fall to her knees and slobber on the crotch of any big banker she meets while she picks his pocket. The campaign contribution is literally pocket change to them.

All Risk No Reward's picture

While true, these questions still aren't comfortable for the establishment.  I do not think she's likely evil, just gullible without a good understanding of human history.

Taint Boil's picture



Ok I’ll bite. With the “You didn’t build that” line. Hmmm. Build what exactly. Let’s pick one thing - roads. When the ACME catapult company ships its product to Willie E Coyote, how does it transport its product? On roads it paid for or the roads everybody paid for? (Including them). When your local illegal immigrants take a trip over to Trav777’s house for a little chit chat and BBQ but first they need to fill up their tank – are they paying gasoline tax? Road taxes? Who is paying? 

I don’t always like her and I don’t always agree with her … but … just playing the devil’s advocate here so junk away assholes. 

OH wait … what would Freddie say? Oh yeah, Hope and Change. LOL.


Your factory is on fire – who ya going to call? The fire dept YOU paid for.

Freddie is stealing scrap out back – who ya going to call? The police dept YOU paid for.

How you going to call? – With phone lines YOU paid for. 

Anyways, I think that was her point.



fonzannoon's picture

"when seconds matter the police are just minutes away".

Also when they get there they may just shoot indiscriminately and if you are collateral damage....shit happens.

nmewn's picture

Which is what makes her and O'Barry's “You didn’t build that” line so incredibly stupid for even Harvard graduates.

Producers did in fact build that...all of it and they paid for every square inch of it, all of it.

Government didn't pay for any of it because government >>>DOES NOT PRODUCE ANYTHING TO MAKE A MONETARY PROFIT IN ORDER TO BE TAXED<<< to build anything. 

Its pretty basic.

RockyRacoon's picture

You know, as well as any intelligent person here, that the pundits twisted the entire theme to businesses not building their own enterprises -- which was wrong.  You are right on every count; it was the "interpretation" that was incorrect.  In actuality, we all built that.  Businesses which pay no taxes are the bad guys here, and we both could work up a pretty long list of well-known names.

nmewn's picture

Anyone who paid taxes, paid to have "that built". And you know as well as I do that taxation of business (however low or high) is just passed straight through for the consumer to pay in order to maintain the businesses profit margin.

If it doesn't make a reasonable profit, it lays off it's employees and it closes its doors.

So "taxing business" is a non-starter with might as well say, raise more taxes on the consumer...because that's who will wind up paying.

richard in norway's picture

My god your as rabid as a commie

nmewn's picture

lol...commies don't believe in God, do they? ;-)

SafelyGraze's picture

the "vampire squid" is a good metaphor

and so is the "jewel wasp"

here's "Parasite tales: The jewel wasp's zombie slave"

watch in awe and come up with your own interpretationification

medium giraffe's picture

What a fascinating little bug, thank you very much for that, never heard of a Jewel Wasp before.  Very apt, I think the drug used on humans must be 'induced materialism'.

Kirk2NCC1701's picture

Also interesting... there are not 1 but 2 stinging anagrams that can can be injected in there, just in the right spot.  ;-)

Taint Boil's picture



Wow - amazing. Cool stuff.

NotApplicable's picture

In this case it's beyond cheap.

Am I the only person to notice she put the question backwards? (Especially given the reference to the petty drug user.)

She should've been asking, how SMALL of an amount of money laundering would allow them to safely prosecute without upsetting the system?

The issue at hand here is this, how big of a crime does one have to perpetrate in order to become too big to jail?

Inquiring minds want to know...

Pegasus Muse's picture

History has taught us there's a way to clean up a mess like this:

Quick, effective, and energy efficient. 

RockyRacoon's picture

HSBC was very accomodating of its depositors!

The banks' laundering transactions were so brazen that the NSA probably could have spotted them from space. Breuer admitted that drug dealers would sometimes come to HSBC's Mexican branches and "deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows."

Read more:
All Risk No Reward's picture

It is pretty simple, people.  This is a biggest Finance Capital tyranny.

They control everything big.

Big Money Definition and Creation

Big Government

Big Drug Running

Big Corporations

Big Religion

Big Schooling (it isn't education, people)

Big Military

Big Media

Big Everything

The energy source for all this wickedness is Debt Money Tyranny

Everything flows from Debt Money Tyranny

“In our time, the curse is monetary illiteracy, just as inability to read plain print was the curse of earlier centuries.”
~Ezra Pound

"If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation.  This is a staggering thought. We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in
circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon."
~Robert Hemphill, Credit Manager of Federal Reserve Bank, Atlanta, Ga.
Source:  In the foreword to a book by Irving Fisher, entitled 100% Money (1935)

Nicole Foss on Finance and bubbles

earleflorida's picture

@ NA

when you set one up for a fall you never ask what's expected... these guys are we'll tutored and pre-programmed in the language of ambiguity

think of a baseball pitcher's arsenal of pitches... they were looking for a fastball and she threw a knuckle ball, and finished em off with a 90mph slider!

kaiserhoff's picture

I remember a "know your customer" requirement from the old days with some teeth in it.

Seems that if Lloyd, Jamie, and Warren know their customer is a drug cartel, that's sufficient.

Ignatius's picture

What it tells you is who is in charge (hint: hangs out w/scarface).

If equity were the law then every non-violent drug offender would out today, time served.

Fuck'em and their 'war on drugs'.

Jury nullification, bitches.  As Doug Stanhope says "the guiltier they are, the better.'

PMakoi's picture

I have a complimentary BCCI necktie!  LOL, treasure!

earleflorida's picture

BCCI helped finance Pakistans illicit nuclear program, with A.J [father of pakistan's nuclear program... and under the nose of Ronny Reagan`bozo, who also helped fund the program [ just to say-- we defeated the russians?!?!] Khan... while Pakistan used the avand?guard, ISI as a trading hub for Afghanistans poppi fields via China, Burma, et.el. 

remember Iran /Contra where oli flew all the dope into a small airport just outside of Clinton's governor's mansion where oli was a guest for months--- isn't it sad, or curiously funny, that everything this country does always fails miserably after a decade or so?

we have a covert problem that's now manifesting in our own back yard?!

yes we can... or change is good, is doing a great job shortening the timeline?

Gazooks's picture

 'No question the activity that was the subject of the enforcement action against HSBC was egregious...'


 there's also no question that it's a daily operation administered at Langley. Today and everyday.

All Risk No Reward's picture

Note the key points in the article:

1. Only the whistleblower was reported as being pushe dout of Wachovia.

2. The $10 billion to $376 billion in drug money WAS NEVER REPORTED RECOVERED.  I think it is safe to assume it was never recovered because Big Finance Capital, who runs the banks, the governments and the big drug cartels, wanted the money outside the system and so they got it.  The public is too brain dead to catch them, so they just do it and laugh at their victims who are so "out of it" they think we deserve what we get - and even use their media to tell us that to our face!

Netflix Cocaine Cowboys and you will understand how the mega banks know where the drugs and money are flowing and see, first hand, how the US military invades foreign drug running countries and confiscates drug trade bank accounts.

The system is corruption, people.

Humans are not rational creatures, we are rationalizing creatures - and this fact will be the end of most of us.

Got rational?  Got Trivium?  Got Grammar?  Got Dialectic?  Got Rhetoric?


archon's picture

Talk is cheap, as everyone in politics knows, and Ms. Warren has a known history of being a blowhard.  If she actually does something about it, then I'll start to notice.  Until then, she's just another noxious vapor floating around Foggy Bottom.

francis_sawyer's picture

So... We're talking 'WARREN vs. COHEN' here & expecting truth?



CPL's picture

Bring real cash.


Gold and silver is tradable outside earth.  A lot more than is let on.  So are ideas btw.


Good ideas > gold/silver > nothing


The universe is an interesting place.  Come join us.

slyhill's picture

Yo JG, you're harshing my mellow.

CPL's picture

Life sucks, pick supportability, welcome to being stuck on earth.

medium giraffe's picture

CPL - Any chance of a lift?  Earth. What a shithole.